Asiamet Resources (LSE:ARS) rose 4.3pc to 6.9p on Monday morning after continuing its hot news streak with the upgrade of its Beutong copper-gold resource in Indonesia.

The firm revealed a 2019 mineral resource assigning the asset a measured resource of 34Mt at 0.67pc copper, 0.13g/t gold, 1.68g/t silver, and 90ppm molybdenum. Meanwhile, its indicated resource has been set at 56Mt at 0.58pc copper, 0.12g/t gold, 2.07g/t silver, and 104ppm molybdenum.

Finally, Beutong’s inferred resource now hits 419Mt at 0.45pc copper, 0.13g/t gold, 1.14g/t silver, and 125ppm molybdenum. All-in-all, this translates to total resources of 2.43Mt copper, 2.11Moz gold, and 20.9Moz silver.

Beutong is a sizeable high-quality copper, gold, silver, molybdenum deposit outcropping at surface that boasts production licence tenure and is based near existing infrastructure. The upgrade follows an infill drilling programme completed last year that improved Asiamet’s geological understanding of the asset.

What’s more, the prospect appears to offer plenty of upside potential, remaining open to the east, west, and at depth. Indeed, the deepest drilling completed at Beutong to date has intersected porphyry mineralisation to around 800m below surface and 200-300m below the depth of drilling used to delineate its resource.

Alongside this, Asiamet has modelled strong copper, gold, and molybdenum grades near a sizeable magnetic body below current drilling. It believes this offers ‘excellent potential’ for the discovery of a high-grade ore similar to well-known porphyry systems like Wafi Golpu and Cascabel, owned by Newcrest and Solgold respectively.

Asiamet is now planning to complete further drilling campaign to grow the Beutong deposit well beyond the current resource, test the potential for a high-grade core, and explore early stage development opportunities.

The company’s chief executive Peter Bird, added: ‘Junior companies with large, well located development stage copper inventories such as Asiamet are rare and extremely well positioned to benefit from widely forecast stronger copper prices. 

‘The 2018 drilling program has improved our geological understanding of the deposit and this updated Mineral Resource Estimate in accordance with JORC 2012 provides strong support for the integrity, size, scale and upside potential of the project.  Future drilling campaigns will be directed to expanding the Resource, testing the potential for a high grade core at depth, and exploring early stage development options for the project.’

The upgrade at Beutong comes just days after Asiamet revealed that strong drilling results have taken it another step closer to completing a bankable feasibility study (BFS) for its BKM copper deposit in Indonesia. The business said that the latest round of assay results received from infill and geotechnical drilling have confirmed its expectations for the deposit. It added that they also ‘further strengthen’ resource models at the site.

Highlights from the latest results include a hole called BKM31550-06 that delivered 19m at 1.16pc copper from a depth of 72.5m. This included 5m at 1.43pc copper from 82.5m depth and 2m at 2.61pc copper from 89.5m depth. Another hole called BKM31550-09 included 27m at 0.67pc copper from 57.5m depth. This featured 3m at 2.15pc copper from 80.5m depth.

Asiamet has now completed 37 resource evaluation holes and four geotechnical holes for 5,665m of diamond core drilling. It has received assays results for 32 holes, with the remaining nine expected before the end of the month. Once the company gets these, it will update its resource models at BKM, using this to generate first ore reserves for the BKM copper project.

The BKM BFS is expected to precede the delivery of a final feasibility study by the close of H1 2019 and first production by the end of the year. Asiamet has already carried out a preliminary economic assessment at BKM, which gave the site an after-tax NPV10 of $204m and after-tax IRR of 39pc. This calculation was based around a 25ktpa copper cathode heap leach operation to be carried out over an initial eight years.

BKM’s NPV alone dwarfs Asiamet’s current £66.2m (c.$87.6m) market cap considerably. What’s more, this figure doesn’t include the ‘district-scale potential’ Asiamet expects to be on offer in the area surrounding the project. This point was highlighted last month when institutional investor JP Morgan took advantage of a slump in Asiamet’s share price amid the resource market downturn to increase its stake to 9.37pc.

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.

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